If you have ever read the “Rich Dad Poor Dad” series, you would be familiar with what is called the cashflow quadrant. The cashflow quadrant is a 2×2 box with the letters ESBI in each. They stand for Employee, Self Employed, Business Owner and Investor. The key to wealth is getting from the side of the quadrant where your income is based on your labor and your time (ES) and over to the side where your income is based on ability to employ your money and other people (BI).
Right now I am reading “The Snowball” which is the story of Warren Buffet. The book is called “The Snowball” because that is how Warren built his wealth, like a snowball from small to large and building upon itself. What I am learning is he created a fund that is similar to what we are doing with the Investment Club. He pooled together funds and scaled up his activities. That fund allowed him to eventually take large positions in companies, vote himself onto the boards, dictate the policies of the company and drive up returns in the process. This is I quadrant activity.
Another thing Warren did was start purchasing businesses. In my opinion, businesses are the ultimate wealth generator. This is because when you own and operate a business you can sell a product multiple times for a profit where you can only sell your time once on the ES side. Business is a wealth multiplier.
All of this is relevant because Warren shows that as we scale this club we will be able to manage stocks but also purchase businesses and real estate with the same funds. I get very excited when I learn of things like this because it shows that the sky is the limit. It might seem far-fetched but if someone has already done it that means that it is possible. When we get to the point where we are purchasing businesses we can ultimately make 100k in cashflow per year on a 100k investment, in perpetuity while still maintaining the 100k in the business as an asset.
We are doing some great things and I know we will go far if you keep investing with us. Let your friends in on what we are doing and continue to spread the word to your followers. We are now at 50 members and 10k invested!!!
The goal now is 500 members and 1 million invested for 2017. This means we have to level up and engage in the 10X activities that will get us to that goal. I hope you have a great and blessed Christmas.